24-Sep-10 News -- UN meets to discuss surging food prices - 24-Sep-2010 - Generational Dynamics

Generational Dynamics Web Log for 24-Sep-2010

24-Sep-10 News -- UN meets to discuss surging food prices

Wheat prices have risen by 60% in the last 12 months.

United Nations schedules emergency meeting over surging food prices

Wheat prices have risen by 60% in the last 12 months. In addition to the direct impact on food prices, it also impacts the cost of animal feed, resulting in international meat prices at a 20 year high, according to the Telegraph.

Food prices have spiked in the last couple of months because of the drought and wildfires in the Russian Federation, which led to a Russian decision to end all wheat exports until the end of 2011.

According to the U.N. Food and Agriculture Organization (FAO), world food prices are still well below those reached during the major food crisis of 2008.

But food prices are still rising, and because of widespread anxiety about the stability of food markets, the FAO has called an "extraordinary meeting" in Rome on Friday to discuss the situation.

The FAO announcement contains the following interesting statement that I hadn't seen before:

"However, with an increasing proportion of world grain supplies originating from the Black Sea region, an area known for large variations in yields, unexpected production shortfalls are likely to emerge more as a common feature rather than an exception in the years to come."

Ordinarily, yield variations in one region wouldn't matter much to world prices, but as time goes on and population grows faster than the food supply, marginal issues like this one become increasingly important.

A major trend developed after the world food crisis in 2008. Countries around the world became concerned with food security, and began competing with one another to purchase available farmland, usually in Africa and South America.

Sovereign wealth funds from the Mid-East, as well as state-entities from China, the Pacific Rim, and even India are trying to lock up chunks of the world's future food supply according to Ambrose Evans-Pritchard in the Telegraph. This world wide "land grab" has the potential for conflicts in the future.

(Comments: For reader comments, questions and discussion, see the 24-Sep-10 News -- UN meets to discuss surging food prices thread of the Generational Dynamics forum. Comments may be posted anonymously.) (24-Sep-2010) Permanent Link
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Generational Dynamics Web Log for 24-Sep-2010 24-Sep-10 News -- UN meets to discuss surging food prices

United Nations schedules emergency meeting over surging food prices

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Generational Dynamics Web Log for 24-Sep-2010
24-Sep-10 News -- UN meets to discuss surging food prices